Selling a Product vs. Solving a Problem

All of my clients have struggled to reorient their thinking from selling a product or service, to solving the customer’s problem. What’s the difference? When you think that your business is selling a product or service, you don’t see everything that your target customers need in order to be successful or happy with your product or service. This makes it very difficult for you to win and retain customers, and to grow your business, because satisfying your customers is a hit-or-miss proposition.

On the other hand, when you think that your business is to solve the customer’s problem, your view shifts from being focused on your own products or services, to being centered on your customer’s view of the world. Now you can answer the question, what is the “whole solution” – the set of products and services needed by your target customers to completely satisfy their compelling reason to buy?

When you sell whole solutions, you will be fulfilling whatever compelled your customers to choose you as their supplier, and you will be satisfying them completely. Think about the products or services that make you so happy or meet your needs so well that you prefer them over their competitors so much that you’re willing to spend more, or go farther, or wait longer to obtain them – they are compelling whole solutions for your needs or wants.

How can you tell whether you are selling whole solutions that really solve your customers’ problems, instead of selling just products or services that might or might not satisfy your customers? Here are 2 diagnostics you can use:

  1. What percentage of your customers say they are completely satisfied with the product or service that you sold them, would recommend your product or service to other people like them, or will buy (or renew) your product or service again? If that percentage is less than your competitors, you’re not selling the whole solution that your customers need. In fact, your competitors are eating your lunch.
  2. If you don’t know how you stand versus your competitors in answering question 1, then what percentage of your qualified prospects do you actually close, or what percentage of people who visit your website or walk into your store actually buy something from you? If that percentage is a lot lower than you want (or too low for you to achieve your business goals), then you’re not selling the whole solution that your prospects or website visitors or retail customers need.

In both cases, you need to either change your focus to be on customers you can satisfy better than your competitors, or you need to change what your selling or how you’re selling it.

Why is it so hard for the management teams of many companies to change from selling a product or service, to selling a solution to their customer’s problem? Among my clients, I’ve found the following barriers or blinders:

  • No one on the management team was ever a customer for the kind of product or service that the company sells, so they don’t “relate” to their customers and can’t understand their customers deeply enough to make the right decisions about product, price, promotion, packaging, place, or any other attribute that will compel their customers to buy and be satisfied.
  • The management team either doesn’t have the data or cannot decode the metrics of their business to see that they are doing a poor job of satisfying their existing customers, getting references or testimonials from them, and/or getting repeat business, renewals, upsells, etc. This problem is particularly severe when the management team rationalizes their poor performance as “not their fault” by declaring that their product is so revolutionary that most customers don’t understand it (and that’s why their close rate is low), or that they cannot find enough customers who need it (and they need more leads instead of figuring out how to increase their close rate), or that it’s a lot easier to get orders from customers who might or might not be satisfied than it is to put in the effort to focus on just those customers they can satisfy (and that they can tolerate having a lot of unhappy customers who won’t buy again).
  • The management team is confused about the purpose of their business. “The purpose of business is to create and keep a customer,” wrote Peter Drucker, one of the best-known and most widely influential thought-leaders on management. No business can succeed if its purpose is something other than creating and keeping customers.

If you are struggling to change from selling products or services to solving your customers’ problems, you’re not alone. You can do it. My clients have done it.

Smart Entrepreneur Takes Start-up from 0 to 200

When my good friend and collaborator Jonny Goldstein of Envizualize introduced me to Mina Mansour in January 2010, I thought that Mina had a brilliant concept for a product family of software plug-ins that add ecommerce capabilities to Salesforce.com, the popular sales force automation system. Mina is the founder and president of IdaApps, a software company she started after 2 years of building custom apps for Salesforce.com customers.

Mina saw that many of Salesforce.com’s 65,000 customers needed inexpensive online product catalogs and shopping carts so they could easily add ecommerce to their Salesforce.com operations, instead of spending $100,000 and up for custom-built ecommerce sites. Mina explained to me that she had:

  • built and tested two easy-to-setup ecommerce apps for Salesforce.com’s Force.com cloud computing platform
  • submitted the apps to Salesforce.com’s app certification process
  • identified several consulting and software services firms who could resell and customize her apps for their Salesforce.com customers
  • started building a pipeline of leads by networking with people at Salesforce.com meetings.

When I talked with Mina, I realized that she had two more assets that would be very valuable:

  • she had 1,000 followers on Twitter (from connecting with people in the Salesforce.com ecosystem)
  • she had the “can do” attitude required to overcome the obstacles that all start-ups face.

Over the next 6 months, I worked with Mina to help her negotiate a contract with and close her first customer, sign her first channel partner, build her marketing and sales process, fine tune her marketing messages, fill her pipeline and close more deals. With over 200 customers worldwide today, Mina has proven her concept many times and over, and taken her start-up to the big leagues.

Please click on the image below (opens a YouTube page in a new browser tab) to see a terrific video about the eCatalog and eStore apps from IdaApps, and then check out the IdaApps website for testimonials from her customers and more info.

IdaApps video

 

Dave Drives Profitable Turnaround with Routes-to-Market

In this quick and easy to understand video, Dave, a product manager for a footwear company, uses the Routes-to-Market methodology to turnaround sales.

 

Still Cold Calling? There is a Better Way

I thought only office supply companies were still using old and worn cold calling tactics but turns out I was wrong. Recently, a friend who is a Regional VP of Sales of an enterprise software company complained that her boss had mandated a weekly “cold calling day” for all sales people. Growing the pipeline is their most pressing sales challenge but cold calling is no longer a productive way to do that.

This type of reaction and the exponential waste it creates makes me cringe. Sure, there is a small percentage of sales professionals with silver tongues who manage to have some cold calling success, but for the vast majority cold calling is ineffective and inefficient.

Old habits die hard and this must be the case for cold calling as a tactic. Most sales leaders today learned a sales methodology in which cold calling was a given. It’s time to replace “cold calling” with “permission marketing.” Permission marketing is not new. Seth Godin, the father of permission marketing, made the concept famous. His classic line, “How do we get people to raise their hand?”, is the question that progressive sales leaders should ask today.

Before you say, “that’s marketing’s job, that’s not my area of responsibility”, let me say, “think again.” To borrow from fellow blogger, Kristin Zhivago, “the traditional division between marketing and selling no longer matches the customer’s buying process.”

Why is this so, you ask? The neatly organized idea that marketing captures inquiries, nurtures them into viable leads, and then, when qualified, passes them to sales, just doesn’t jive with the buyer’s reality. With Google power, a prospective buyer can go from acknowledging they have a problem through the various stages of the buyer’s journey in an afternoon. Buyers’ questions that BG (Before Google) required a conversation with a salesperson are now answered through online searches that pull from blogs, websites, discussion forums and other social network communities. In short, the line separating marketing and sales functions is blurred.

This is good news for sales organizations who choose to adapt. By looking at the sales challenge differently and by using Modern Marketing, you can create a relationship with prospects in which they warmly welcome a call from your sales team because they’re ready to talk to a salesperson. Obviously, this kind of call is much more productive for both the customer and the salesperson.

Old habits and outmoded techniques die hard but the world has changed. Sales teams that adapt to the evolution of the customer’s buying behavior will find the click they hear is a prospect clicking to buy rather than a prospect hanging up on an unwanted cold call.

Google Power Has Changed the Buyer-Seller Relationship

Takeaway

As a marketing and sales leader it’s just good sales hygiene to have someone regularly “google” as if they were a prospect for your product or service. That way issues that show up can be addressed so they do not adversely affect your prospect’s perspective and your pipeline growth.

My recent shopping experience for new health insurance provides a vivid example of the importance of doing this. An insurance salesman called me last week. I took down all the information, got his name and the name of the company he represented, and after the call I googled to find out about them.

The first page of Google results showed three listings that had fraud or something to that effect in the title related to this company. Needless to say, I saved myself time and headache and dropped that candidate fast. My future calls will be limited to only those that have survived my online research and vetting process. You too have probably had your own experience of Google-enabled “empowerment.”

The Game Has Changed – Have You?

As the saying goes, the game has changed. Those who learn the new rules of selling brought on by this rebalance of power will have the edge. Those using old game strategies will find they are losing points.

“Google Power” arms your prospects with information so they have a broader view of their options. Expert searcher Chris Sherman, recently published Google Power to help everyone “unleash the power of Google.” The power of Googled information acts as an equalizer between buyer and seller.

Consider this new-found buyer power within an enterprise selling situation. Buyers are now armed with much more knowledge and insights about the product or service they need. Just as I found “the dirt” on this insurance company, your prospective customers can find “the dirt” on you and your company. It doesn’t matter if the negative news relates to technical aspects of your product or service or to sales tactics. The fact is the news creates a hurdle, and in a worse case a wall, for your prospects and your sales team.

Of course, you work for a reputable company and few Google results for your company are negative. Nevertheless, this “google factor” still changes the landscape for your sales team. Your prospects have likely done their research and know the trade-offs between their top options including your competitors. This knowledge readies them to ask more pointed questions in order to address whatever they found out online about your company. If your salespeople deny, lie, or fail to appropriately address these facts, then prospects will not continue their buying process with your company.

Sales Tactics Must Evolve

Most sales professionals have evolved and truly respect the relationship with their prospects and clients. Yet, I still hear enough commando type stories that I think it’s worth mentioning that traditional “pressure tactics” are out of sync with the new balance of power. Companies and sales leaders who allow these outdated selling techniques do so at their own risk. The Google effect means that even one negative sales experience that gets reported on a user forum potentially affects business prospects for your entire sales team. Consultative selling is in. For thought leadership on Sales 2.0 see the interview with Jill Konrath called “Don’t Become a Sales Dinosaur“.

Don’t let Google results work against your sales efforts. Good sales hygiene includes regular googling the way your prospective clients use Google, training your salesforce and channel partners on how to address the issues that show up in Google results, and updating sales tactics to ensure they fit with the new balance of power between buyer and seller.

The Buying Cycle and the Sales Cycle

The Sales Cycle is the sequence of steps that vendors follow to engage with customers throughout their Buying Cycle, as shown below.

Buying and Sales Cycles

As you can see, the Sales Cycle includes all of the customer-facing activities of marketing, sales, distribution and customer service.

Across the 5 steps of the Sales Cycle, vendors have a choice of many resources for communicating with customers and for providing products and services to customers. The resources can be internal or external to the vendor. For communications, the resources include a wide variety of media (websites, TV, radio, newspapers, magazines, billboards, the vendor’s newsletter, etc.). To provide the vendor’s product or service, the resources include many different types of sales and distribution channels (e-commerce, telesales, catalog, retail, specialized resellers, distributors, etc.). After-sale services can also be provided by various resources (systems integrators, call centers, factory repair, field repair, self-service, etc.).

A “route” is a combination of internal or external resources that moves the customer from the beginning to the end of the Sales Cycle.

The Routes-to-Market methodology helps vendors plan, operate and optimize their routes. Optimized routes produce more revenue and profit per dollar spent on marketing, sales, distribution and customer service.

The RTM methodology was originally developed by the authors at IBM and has been subsequently adopted by Adobe Systems, Canon, Cisco, F5 Networks, Hewlett-Packard, Hitachi, Plantronics, Sharp, Sun Microsystems and other companies. The authors’ book, Building Routes to Customers, includes case studies on some of these companies’ use of RTM.

css.php